Guest Post: China To Embrace Fracking In An Effort To Ramp Up Energy Production

China is leaving no shale deposit unturned in its effort to develop indigenous energy resources.

On 24 November China’s Ministry of Land and Resources geological exploration department head Peng Qiming said during a press conference that China’s combined oil and natural gas output, 280 million tons in 2010, is projected to rise to 360 million tons of oil equivalent by 2015, a 23 percent increase in four years and will rise to 450 million tons by 2030, a 62 percent increase over 2010 production, impressive rises in production by any yardstick.

And Beijing authorities in their drive are embracing a controversial natural gas production technique that is coming under increasing government scrutiny in both the United States and Britain – hydraulic fracturing, or ‘fracking.” China has started drilling to meet an ambitious annual production target of 80 billion cubic meters by 2020 by which time the government is seeking to meet a target of generating 10 percent of its energy needs from natural gas and 15 percent from renewable sources and launched a national shale gas research center in August 2010.

In April the U.S. Energy Information Administration estimated that China has nearly 50 percent more "technically recoverable" shale gas than the United States, placing its reserves at 1.275 quadrillion cubic feet, 12 times the country’s conventional natural gas deposits, as compared with U.S. shale gas reserves of 862 trillion cubic feet.

Despite rising environmental concerns about fracking in both the U.S. and Europe, Chinese authorities up to now have shown no such hesitations. On 20 October in Shanghai China’s Ministry of Land and Resources Strategic Research Center deputy head Zhang Dawei said, “The government places high emphasis on developing shale gas and has been actively studying supporting policies,” adding that a national shale gas plan will shortly be announced and more than 10 shale natural gas blocks are to be offered to Chinese state and private companies a the second round of auctions

Earlier this year price and supply fluctuations in China’s oil and coal imports triggered disruptive electricity blackouts, increasing the Chinese government’s interest in the country’s vast reserves of shale natural gas, which will likely prove to be a more stable and predictable energy source as the central government can more easily control the pricing for domestically produced energy supplies. An added benefit of developing the country’s shale natural gas reserves is that over time, Chinese shale natural gas will be cheaper than importing liquefied natural gas over long-distance pipelines from Central Asia as rising volumes come online.

There only remain those pesky environmentalists, not a current problem as China’s media is largely state-owned and shies away from contentious topics.

Ever eager to get a share of the Chinese market, on 17 November 2009 during a state visit to Beijing, U.S. President Barack Obama met with Chinese President Hu Jintao and agreed to share American shale gas technology and to promote U.S. investment in Chinese shale-gas development. The “U.S.-China Clean Energy Announcements” posted by the White House Office of the Press Secretary posted the same day stated, “The two Presidents announced the launch of a new U.S.-China Shale Gas Resource Initiative. Under the Initiative, the U.S. and China will use experience gained in the United States to assess China’s shale gas potential, promote environmentally-sustainable development of shale gas resources, conduct joint technical studies to accelerate development of shale gas resources in China, and promote shale gas investment in China through the U.S.-China Oil and Gas Industry Forum, study tours, and workshops.”

Well, if Zhang’s 20 October announcement is anything to go by, U.S. investment in China’s shale gas industry will not include allowing overseas companies in the upcoming sale of shale gas leases. Up to now China has auctioned off two shale natural gas blocks in southwest China to two Chinese companies, including state-owned giant China Petroleum and Chemical Corporation Ltd. (Sinopec), and plans to hold a second auction either later this year or early in 2012.

As a consolation prize for foreign energy firms, they can invest in and supply technology to Chinese domestic shale natural gas operators and developer. Despite the prohibition, Chevron Corp., BP Plc and Norway’s Statoil ASA are among international energy companies that have already begun talks to form joint ventures in China to tap shale gas assets.

Earthquakes are real, but exceptionally small. In 30 years, that fracking has been employed, the recent Earthquake in Oklahoma was the largest that could ever really be attributed to it.

Water contamination depends on the specific location or the well and the distance to the water table. If they are close, then there might be contamination, or an increase in the natural amount of contamination, whereas if they are hundreds of feet apart, separated by a thick layer of impermiable material, as is the case here in West Texas, there is no contamination of wells.

Yeah, I used to fish for trout in pristine mountain lakes when I was younger. All the time I thought nothing to worry about - after all nothing upstream but streams and more beautiful mountain lakes. I told this to a guy once and he busted out laughing saying between breaths that the lakes I had been fishing in for years were some of the most polluted lakes in the country. It seems that back in the 40's and 50's they used to dump defective power transformers into the lake. Yeah, you guessed it. They were full of PCBs. But of course no one knew of the dangers of PCBs then just like they don't know of the dangers of Fracking now. Several people have reported that their wells have been corrupted by this reckless process.

They don't care. We are ignorant enough to give our top technology or be stupid enough to allow their huge numbers of spies into our countries to steal and copy our technology to compete against us. Then when the corrupt elite get rich off it in China they quickly send their families to the USA, Canada and Australia along with huge sums of corrupt money and buy up American land, businesses, and resources. From there they can chain migrate the extended family. They take advantage of our stupidity and buy and colonize our country for pennies on the dollar.

LMFAO! Was bound to happen, the world is awash in shale availability and it will get produced. So Cheneire Energy spends billions on an LNG import facility years ago, to never be needed as we unlock shale. Now they are spending big to create liquifaction to export domestic gas...............right when it will not be needed! What a great company to NOT own!

Whoever figures out how to transition cars from oil to nat gas will be the next Rockefeller.

NatGas is the only thing that makes sense which is probably why we're not doing it. We have all this NatGas in this planet and we're building wind farms? Give me a fuckin' break. Wind doesn't do shit but dry clothes.

Wind farms kill birds by the hundreds of thousands. Where the fuck is PETA to shut that scam down?

you sir have hit the nail on the head. Countries like India, Pakistan, Iran, Argentina and Brazil are rapidly transitioning to CNG in their major cities which is cheaper and environmentally-safer. when i first came to America one thing that hit me was why the fuck would they use petrol/diesel buses in a capitalist nation when CNG is now almost half the price.and they already have cars running on CNG all over the developing world dont know who became the rockefeller from that.

Harder to do for cars. Probably better off converting NatGas into liquid hydrocarbons. The only thing holding it back is the (reletive lack of) a spread between the price of NatGas and refined petroleum. As the infrastructure is developed, the required spread to make it profitable will get lower, as capital investment in the field is made.

At least wind farms have a positive EROEI. Better than this ethanol nonsense.

be that as it may, several fleets of medium to long haul rigs have gone to a two tank diesel\vegetable oil combo, with much success. (AS in lower running costs.)

If Amerika were truly a progressive, free enterprise country, that conversion would have been gone viral by now....but because it's a filtered waste product that nobody in the corporate kleptocracy can monopolize or make enormous profits from, the drippings from thousands of American fast food outlets will keep adding to the toxic buildup instead of to energy independence...

if the trend towards eating away from home continues, probably enough to run an entire countrywide system of low bed people conveyors that take the fatties to and from their fast food headquarters once they get too big to fit into their compact cars, and too poor to buy the fuel to put in them anyways!

Go figure out if current US oil production is less than or greater that the amount of oil used in agriculture. This includes raising livestock and transportation to market... Please do and get back to me....

sorry, not into run n fetch today big fella....but if you have a point to make regarding the potential of waste vegetable oils to provide a partial solution to energy independence, by all means, go for it!

Why the hell compare natural gas on a volume basis to oil? That's like comparing gasoline vapour to coal, totally ridiculous. Do you seriously believe that a vehicle would be fuelled by a bloody big balloon of uncompressed methane, if not then why make the ridiculous statement?

Liquified Natural Gas contains 1/600 of the volume of natural gas so you should use that comparison. Yes, to liquify natural gas requires energy, to refine gasoline or diesel from crude oil also requires energy.

LNG vehicles have been around for more than 10 years in Europe. Just some of the manufacturers who build LNG vehicles (often twin fuelled with gasoline) are, Audi, BMW, Fiat, Ford, Honda, Mercedes, Opel (GM), Peugeot, Suzuki, VW, Toyota & Volvo. http://en.wikipedia.org/wiki/List_of_natural_gas_vehicles

I've looked for about 10 minutes but can't find a figure. Given the use of LNG throughout the world, including the US, I would imagine that the costs of that v. refining oil must be comparable. In Korea LNG is often decompressed and recompressed for onward transit. I doubt that they do that for fun.

I did also find; "As of 2009, the U.S. had a fleet of 114,270 compressed natural gas (CNG) vehicles, mostly buses". As I also pointed out above, with a link, there are Heavy Goods Vehicles that are powered by LNG. You were saying that the scaling will not work. You're wrong. Oh, and some LNG supertankers are powered by LNG. How's that for "scaling"?

It is clear that you do not have a fucking clue what you are talking about if you state NG can replace oil....

You do realize that even with the increased NG production from shales that the US is still a net importer of NG?

You also realize that the NG production in the US peaked in 1970? That being said, it is possible that the US will exceed that peak in the near term future, I'll give you that much.

So for shits and giggles, put together a spread sheet that ramps up NG production such that the BTUs of imported oil are replaced in 10 years, now estimate what that 100 year supply of NG looks like...

I bet you cannot even do that exercise, can you Bob? So, in other words, someone with no techical understanding of the issue and who is just parroting some industry shill should be trusted to provide real insight for other readers here at ZH...

Yeah, there was a several hour series on energy and the future of the planet a couple of years ago. They had politicians and scientists from the left and from the right and they all agreed that there is absolutely nothing on the planet (not gas, not uranium, not solar, not wind) that can come close (even all combined) to replacing oil.

What solves the NG problem or is NG supply going to exponentially rise forever as well?

You might want to take a gander at NG well supply curves before talking such nonsense. NG is FAR too valuable to be burning. Nuclear should provide electricity and synthesize liquid fuels (yes, it's a battery)

Bloomberg’s blockbuster story–showing that the Fed was dumping $7.77 trillion into the same banks that Treasury was claiming were solvent to qualify them for TARP–shows a number of different things. It focuses on the $13 billion in profits the banks made off of massive secret loans from the Fed.

The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.

More importantly, IMO, the Bloomberg piece also shows how Ben Bernanke, TurboTax Timmeh Geithner, and Hank Paulson used secrecy to get DC’s bureaucracy–both Congress and Executive Branch officials–to push through his preferred plan to prop up the TBTF banks.

They did this in two ways: first, by keeping details of the Fed’s massive lending secret from the people implementing TARP.

The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.

The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

This meant the Fed could hide the fact that the six biggest banks were basically insolvent, and should have been wound down rather than propped up with a strings-free TARP.

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. Continue reading ?

The 317,000 square foot DTRA headquarters opened in 2005 to bring together the agency's 2000 employees.

In following up on yesterday’s announcement that the family of Robert Stevens, the first victim in the 2001 anthrax attacks, has settled their wrongful death suit with the US Government for $2.5 million, Marcy came across a number of documents recently released through the case. One of those documents got my attention from its title: “Integrated Capabilities Assessment of the U.S. Army Medical Research Institute of Infectious Diseases” (USAMRIID Capabilities pdf). I had anticipated that the document would be a technical assessment that would be relevant to the question of whether the facilities and equipment available to Bruce Ivins would have been appropriate for production of the anthrax spores used in the 2001 attacks. However, it turns out that the document was a report on a 1996 security assessment of the USAMRIID facility where Ivins worked. I almost moved on to other documents, but then I saw the list of agencies that conducted the review: